family dollar

When you walk into a brick and mortar retail store like a Nordstrom, Cabela, or even Family Dollar, you’re being tracked around the store. Not by an over-suspicious security guard, but by the store’s wireless network, using your phone’s Wi-Fi. The store then uses your phone to track you around the store, determine if you’re a repeat visitor, see what departments you visit, and more. Here’s how they do it, and how to stop them.

Shoppers may not associate dollar stores with ecommerce, as the cost of shipping is likely to exceed the price of most items sold in these stores. However, traffic to dollar store sites has been steadily increasing over the past few years, and more shoppers are turning to the web for increased value.

The three main players in the space, Dollar General, Family Dollar, and Dollar Tree, have all experienced a continual growth in traffic since March 2010, with Family Dollar in particular up 130%. Today, all sites see about 1 million unique visitors per month. The growing popularity of these sites is more impressive when you consider that the sites may not even offer the option to purchase online or only recently rolled out that capability. Dollar Tree has had ecommerce capabilities since 2009, but Dollar General just introduced them in September 2011 and Family Dollar doesn’t have the option to purchase at all.

Since the focus of these sites is less on purchasing, shoppers use them primarily as an in-store companion tool—visiting for coupons, weekly ads, and store locators. Family Dollar and Dollar General also have extensive recipe sections that highlight inexpensive meals that can be made using their products. The recipe feature helps to further position these sites as a shopper’s planning resource, and emphasizes the grocery offerings of these stores, a growing part of their business.

Dollar store shoppers are most likely interested in saving money, especially during these economic times. In Q4 of 2011, an average of 60% of online dollar store shoppers also visited Walmart.com in the same month, and Walmart shows up in the top 10 referring sites for each of the stores. Dollar store shoppers may be comparing prices with Walmart and deciding whether to buy in-store or online.

Dollar store sites should continue to offer in-store planning resources as online traffic increases, but they may also want to emphasize their ecommerce potential as well. By offering competitive prices to Walmart and differentiating themselves as a more convenient option, they could gain more shoppers. They are also a good candidate for offering free shipping promotions, as shipping costs may be a major deterrent to people buying their inexpensive items online.

It’s not all about the economy though. Dollar General had to be smart in its expansion strategy too — after all, Walmart is its biggest competitor, and the world’s largest retailer has had similar success recently.

It thrives on hitting markets that Walmart hasn’t taken over, such as small towns that can’t support one of Walmart’s massive big box stores. It also competes with the other big dollar store chains, like Family Dollar. The hybrid concept — somewhere between a giant discounter and a small dollar store — has worked admirably.

Digital Consigliere

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.